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I.T.As. Nos. 449(PB), 450(PB) and 618(PB) of 1981‑82, decided on 24th March, 1986.

‑‑‑S. 59(1)‑‑Central Board of Revenue Circular No. 3 of 1979 issued on 13‑8‑1979‑‑Assessee deriving income from salary and business Self- assessment Scheme‑‑Plea of assessee that his case was falling under self‑assessment scheme and thus was qualified to be assessed under said scheme‑‑Such plea was raised in grounds of appeal before Appellate Assistant Commissioner‑‑Appellate Assistant Commissioner, held, was bound to give finding on such plea.

‑‑‑S. 59(1) Central Board of Revenue Circular No. 3 of 1979 issued on 13‑8‑1979‑‑Assessee deriving income from salary and business Self- assessment scheme‑‑ Assessee taking plea that his case was qualified to be treated under self‑assessment scheme by virtue of CBR Circular No. 3, dated 13‑8‑1979 but Income‑tax Officer rejected said plea and denied assessee treatment under self‑assessment scheme on view that income returned fell short of last assessed income by more than 10% as given in para 2(d) of the Circular‑‑Limit of 10% was, to apply in regard to pending returns for earlier years i.e. cases covered by clause 2(d) of Circular‑ ‑Assessee's case was not falling under clause 2(d) but it fell under clause 2(a) of Circular and required to be processed under self‑assessment Scheme‑‑Order of Assessing Officer as also Appellate Assistant Commissioner set aside and case of assessee was directed to be accented under self‑assessment scheme in circumstances.

‑‑‑S. 59‑‑Central Board of Revenue Circular No. 3 of 1979 issued on 13‑8‑1979‑‑Assessee deriving income from salary and business‑‑Self assessment‑‑Detailed scrutiny‑‑Assessment income exceeding rupees one lac‑‑Income‑tax Officer while selecting case for detailed scrutiny not associating Inspecting Assistant Commissioner in completing assessment nor sought approval of Commissioner of Income‑tax‑‑‑ Income‑tax officer, held erred in ignoring relevant provisions to subject case to detailed scrutiny.

‑‑‑S. 59‑‑Central Board of Revenue Circular No. 18 of 1980 issued on 28‑7‑1980‑‑Assessee deriving income from salary and business‑‑Self assessment‑‑Total income determined becoming more than' last highest assessed income‑‑Income, held, qualified for treatment under self -assessment scheme.

‑‑‑S. 59‑‑Centfal Board of Revenue Circular No. 3 of 1979 issued on 13‑8‑1979‑‑Assessee deriving income from salary and business‑‑Self assessment‑‑Returned income not falling short of assessed income .by more than 10%‑‑Return, held, stood qualified to be handled under self- assessment scheme.

Maqbool Ahmad for Appellant.

Muhammad Khan, I.A.C., D.R. for Respondent.

Date of hearing: 24th March, 1986.

.‑‑The assessee has filed these three appeals in order of question the order of learned A.A.C dated 27‑9‑1981, relating to charge years 1979‑80 and 1980‑81. The year 1980‑81 involves 2 periods, one of full 12 months and the other of 3 months on account of change in the accounting period.

The assessee derives income from salary and business and the main ground, among others, on which the impugned order is being assailed, is that of the case falling under S.A.S., being qualified for the purpose. It was asserted that plea to this effect was raised before the A.A.C. as also in the grounds of appeal before him, but he gave no finding thereon and by the assessing officer it was rejected for untenable reasons.

There is nothing in the impugned order observed in relation to the plea. The order is totally silent in this behalf. But we find that the plea was raised in the grounds of appeal if not during argument and it was incumbent upon him to give a finding on the same.

We find that the plea is riot without force. The case did qualify to be treated under S.A.S. by virtue of Circular No. 3 of 1979 issued by the C.B.R. on 13‑8‑1979. According to this circular, all return for the year required to be processed under S. A. S., subject to certain limitations in respect of company cases mentioned therein. Rut this was the case of an individual and no limitation whatever was there to be applied to it. It was a straight case falling under paragraph 2(a) of the Circular for which no condition anywhere was laid down in the circular. The I.T.O. rejected it, denying treatment to it under S. A.S. on the view that the income returned fell short oh the last assessed income by more than 10%. No limit was set in the circular as regards income, of an individual for Ws year to be qualified under S.A.S. The limit of 10 was there, but it was to apply in regard to pending returns for the earlier years that is to say the cases covered by clause 2(d) of the circular. This case did not fall under the said clause. It fell under clause 2(a) and required to be processed under S.A.S. The I.‑T.O. severely erred in ignoring the relevant provision to subject the case to detailed scrutiny. He further erred in not associating the range I.A.C. with him in completing the assessment and in failing to seek approval of the same from the concerned. Clause 5(iii) of the circular specifically provided that assessment in cases selected for detailed scrutiny shall be made jointly by the I.T.O. holding jurisdiction over such cases and the range I‑. A. C. and where the assessed income exceeded Rs.1,00 000 the assessment shall be approved by the C.I.T. It is manifest that the I.T.O. neither joined the I. A. C. with him in finalizing the assessment nor did he refer the case to the C.I.T. for his approval which it required, the assessed income having exceeded Rs.1,00;000.

As to the next year, i.e., 1980‑81, also the I.T.O. erred in refusing to process the case under S.A.S. To this year Circular No. 32 of 1980, dated 8‑12‑1980 would apply. It was the case of an individual and would fall under the category of non‑company cases. The returned income in this year was Rs.75,943. It required to be seen if the same was lower than .the last assessed income by more than the requisite percentage. If it was lower by more than the fixed percentage then it would not fall to be processed under S.A.S. Under sub‑clause (ii) of the non‑company cases, this would appear to fall and the returned income should not have been lower than 10% or more of the last highest assessed income which was for the year 1976‑77 at a sum of Rs.73,897. Obviously, the returned income did not fall short of the assessed income by more than 10% and the return stood qualified to be handled under S. A. S. and we find accordingly.

This brings us to the remaining period of 3 months of the charge year 1980‑81. For this period, he declared income at Rs.22,557. The same has to be multiplied by 4 for the purpose of comparison, following the principle contained in note 2 to paragraph 6 of Circular 18 of 1980, dated 28‑7‑1980. The total income thus determined, it is apparent, qualifies for treatment under S.A.S., being more than the lint highest assessed income, which was for the year 1976‑77 at Rs. 73, 897.

Thus as seen above the case stood qualified for the period to be completed under the scheme of self‑assessment and should have been accepted thereunder. We, therefore, set aside the order of Learned A.A.C. as also of the assessing officer and direct that the, case be accepted under S.A.S.

M.Y.H. Appeals accepted.

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